Rupert Murdoch's embattled son could face criminal charges after he acknowledged approving out of court settlements to hacking victims and admitted misleading parliament, although he insisted he did not do so deliberately.

Allegations that News of the World journalists also made payments to police officers could also leave Mr Murdoch exposed to prosecution in the US, where Mr Murdoch is listed as deputy chief operating officer of his father Rupert Murdoch’s News Corp, the parent company of paper publishers News International.

Under American law, the Foreign Corrupt Practices Act (FCPA) makes it a crime for American companies to offer corrupt payments to foreign government officials.

If the allegations of payments to police officers are proven, Mr Murdoch could face an American prosecution in his role as deputy chief operating officer the US-listed News Corp.

In 2009, the former Hollywood producer Gerald Green was jailed for six months after being prosecuted under the FCPA for making $1.8m (£1.1m) in bribes to a Thai government official.

Butler University law professor Mike Koehler, an FCPA expert, told The Guardian: "I would be very surprised if the US authorities don't become involved in this [News International] conduct."

He said the FCPA could be invoked because News Corp is an American company and because the alleged payments would have been made in order for the newspaper to make money from the stories obtained.

Brett Pulley, media correspondent for the Bloomberg news agency in New York, said: “If the fall out were to continue, my goodness, if it were to impact James, then we start to talk about it impacting News Corp’s succession plan, so that affects the company globally.”

“He [Rupert Murdoch] had one flirtation with bankruptcy in the early 90s. He’s very dependent on the goodwill of Wall Street and of bankers.

“His company is very profitable now — it’s not quite the same as the 1990s — but he doesn’t want these dominoes to keep toppling …

“The fact he shut down a newspaper reflects how seriously the scandal is affecting a whole empire.”

Meanwhile in Britain, Mr Murdoch's admission that he made out of court settlements to victims of phone hacking could leave him vulnerable to prosecution under anti-snooping legislation.

Alan Johnson MP, the Labour home secretary from June 2009 to May 2010, suggested that Mr Murdoch could be charged under the Regulation of Investigative Powers Act 2000, which covers the “criminal liability of directors”.

It emerged in evidence to a Commons committee in 2009 that Mr Murdoch was aware of a breach of privacy claim by Gordon Taylor, the head of the Professional Footballers’ Association, and had agreed with a decision to settle for £700,000.

Mr Johnson pointed to Mr Murdoch’s statement on Thursday in which he said: “The paper made statements to Parliament without being in the full possession of the facts. This was wrong. The company paid out-of-court settlements approved by me. I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret.”

In a press conference on Friday, Mr Cameron was asked whether Mr Murdoch remained a fit and proper person to run a large company, following his admission that he personally approved out-of-court payments.

The Prime Minister replied: “I read the statement yesterday. I think it raises lots of questions that need to be answered and these processes that are under way are going to have to answer those questions.”

James Murdoch, the deputy chief operating officer of News Corp, has been at the forefront of most of the company’s recent response to the scandal.

By contrast, his father kept an unusually low profile at the technology and media summit in Sun Valley, Idaho, attending with his wife, Wendi, and son Lachlan. He is due, however, to fly to London today to discuss the phone-hacking scandal.

Corporate governance experts in America already believe News Corp’s annual meeting in October could lead to a showdown between Rupert and shareholders over his son’s involvement in the telephone hacking affair. Experts said they could try to block his re-election to the board.

There has also been speculation that Ofcom, the broadcasting regulator, could withdraw BSkyB’s licence to broadcast in Britain because of the scandal.

BSkyB’s share price dropped to 750p by the close on Friday, down 7.6 per cent at a five-month low and wiping £1 billion off the value of the company.